The Body Shop shuts down US operations, files for bankruptcy
The Body Shop, a UK-based cosmetics company, has revealed plans to shut down its US operations and file for bankruptcy. Additionally, 33 of its 105 Canadian stores will start liquidation sales immediately, and online sales through Canada's e-commerce platforms will come to a halt. Despite this, all its Canadian locations will stay open for the time being.
The Body Shop's history and recent struggles
Established in 1976 by human rights activist Anita Roddick, The Body Shop gained reputation for its natural, sustainable, ethical, and cruelty-free products. By 2023, the brand had grown to over 2,500 retail locations across more than 80 countries and was accessible online in over 60 markets. However, the company has faced challenges in recent years. Its then-owner Natura reported a 13.5% year-over-year decline in 2022 and acknowledged that direct-to-consumer channels had reverted to "more normalized pre-pandemic levels," affecting sales figures.
Factors leading to the decline in sales
The Body Shop's decision to shut down comes as high inflation in recent years has taken a toll on traditional retailers, particularly those in malls and targeting the struggling middle class. In late 2021, The Body Shop was sold to asset management group Aurelius for approximately $266 million. However, the sales have not been able to sustain profitability for the sustainable cosmetics brand.
Owners over the years
In 2006, the cosmetics giant L'Oreal acquired The Body Shop for about $1 billion. This was the time when the company seemed promising and was gaining popularity among the buyers. L'Oreal then sold it to Brazilian company Natura in 2017, as it began sensing troubles in keeping the company profitable.